If you can't do the standard 20% for rentals, look at duplexes where you will live in half and rent the other half. 

However you also have to consider what you're going to do when your tenants move out at the end of their one year lease, and how long it may take for you to find new tenants that are suitable to your standards. 

His rent roll said that there were 24 occupied units and 21 vacant units but when I toured I discovered that only 6 units were occupied and there were 39 vacant units, his property manager had been lying to him.

And 15 years isn't exactly short term; it's a standard term in the US.Is this a pre-construction purchase with developer financing?

When I suggested adding something specific in the offer that says “buyer can back out if appraised value is less than X”, they suggested to deal with this after the offer stage and at attorneys review, and use the brokerage’s standard/unmodified contract until we agree on the price.Am I overthinking this?

Is there a standard set of terms?

All fairly standard, all fairly mediocre.

I suspect that your new renters may discovered that you are available on a round the clock basis to take care of any small issue as soon as it comes up or occurs which has potentially become an annoyance due to frequency .

Questions:1) Is this standard for insurance companies to make no guarantee of payment until everything is all done?

I find that when the coverage is gotten from the excess/specialty markets the coverage is often less and the exclusions more than what you would get in a standard policy.